Open source software is software whose source code is freely available to the general public for revision and enhancement. When someone combines an open source program with a product, service, or content that is not open source, it becomes a hybrid project (or open-source-based).
Word on the streets is that Open Source Software is dead. Not true! It’s more alive than ever and with it comes new opportunities for businesses of all sizes. Is your business ready to take advantage? Keen insight from successful open source businesses will help you avoid the pitfalls, and will provide insight into what makes these businesses stand out from the rest. Leverage their insights to decide whether what they do is applicable to you, or if a different strategy may be better suited to your business requirements.
While not typically used by large for-profit companies, some individual developers make pretty good money by taking donations for their open source work. Patreon, GitHub, and Buy Me A Coffee are all popular platforms that allow individuals and businesses to help support open source projects that they use or want to see maintained.
The downside to this model is that it’s really hard to build predictable, sustainable income from it. Some people will heavily use and benefit from updates while never paying the creators, and this frustrates those who do support the project. If you’ve ever asked your boss if you can start paying for some of the free, open source software you use at work, you know how tough this can be to sell.
Bug bounty programs
Bug hunting, or as it’s usually known, bug bounty programs, is a way of earning money either by reporting errors on other systems or by solving them and submitting your pull requests with the code that fixes them. These programs are usually part of the entire vulnerability audit of the software being tested and accompany other internal processes the developers are implementing.
There are very big companies who submit their products for this type of treatment, and when we say “big,” we’re not kidding. With a basic search, we can find some interesting options, but in order to keep with the theme of “making money from open source,” here are some examples of high-paying organizations with bug bounty programs on their open-source products:
- Mozilla: They have two main programs, one for their actual software and one for their websites. Offering to pay up to $10,000 on the first one and up to $5,000 on the latter.
- Apache: This web server is probably known to most (if not all) back-end developers. Through its program it pays bounties of up to $3,000 to those able to solve the most critical bugs.
- Google Android: Also interested in making the most stable and secure mobile OS out there, Google offers up to $150,000 dollars for the most critical problems found and solved (yes, you read that number right).
There are many different lists of bug bounty programs, but you can find a good, up-to-date one on this website. Overall, this option is quite lucrative if you are able to put in the hours. That being said, you also need to specialize your knowledge and focus on security bugs if you want to reap the big rewards.
Last but certainly not least, aside from bug bounties, you can also get paid by fulfilling OSS (open-source software) bounties over at BOSS, a relatively new initiative that has lots of potential. Here, project owners can submit development tasks that they pay for on completion. This is certainly not as lucrative as the above programs but also requires less of a focus on security and can be tackled with a more generic software development profile.
Offering paid support is one of the most straightforward revenue streams for all kinds of open source projects. As a project maintainer, you have a lot of knowledge about the codebase. This puts you in the position to offer consultancy or support services to companies that want to use your code.
On the other hand, offering paid support doesn’t provide a scalable business model for open source projects. Because most projects are maintained by a few developers, there’s limited time for them to offer support to companies. Bear in mind the time required to improve the functionality and maintain the codebase.
In conclusion, it’s an effective way to earn some money as an open source maintainer and keep the project going.
Hosted Version of the Product
Some open source projects allow you to run their software on your own servers for free, but they’ll charge you for a hosted version. For example, you can deploy n8n.io to an AWS or DigitalOcean machine and keep it running on your own, or you can sign up for their hosted version and avoid the hassle of maintaining servers.
While this tactic won’t work for every open source project, it’s a very popular option. It offers a clear delineation between the paid and free versions of the product, and can be bundled with other features like support and training. The downside is that your margins are never going to be very high. If you charge too much, users will be able to justify the cost of maintaining their own servers.
Some software projects are difficult to use without documentation. Making the source code available at no cost does not obligate you to give away the documentation. Consider the example of Shopp, an e-commerce plugin for WordPress. Shopp is an open source project, but to access the documentation you need to pay for a license that provides entry into the website. It is possible — and perfectly legal — to set up a Shopp store using the source code without documentation, but it takes longer and you won’t know all the features available.
Even if you did not create the open source software, you can author a manual sharing your expertise and then sell that book either through e-publishing channels or traditional book publishers.
Software as a Service
An open source project that has generated plenty of demand can choose to offer a Software as a Service (SaaS) business model. This model is most viable for projects that offer a complete application, such as a publishing platform, monitoring tool, or marketing automation tool.
Developers can choose to host the software themselves. However, this means that they have to take care of security, security, and maintenance.
It’s often much easier and cheaper to pay for a managed offering under a SaaS model. Developers pay a monthly fee to use the hosted solution. Therefore, they can focus on the tool itself instead of all maintenance-related tasks. Moreover, a marketing or content team often doesn’t have the required technical knowledge to host a solution themselves. For that reason, a SaaS solution is a great alternative to make money from open source software.
If you have an idea for a project, take it to the community and development on open source software is extremely easy. The tricky part is finding customers, funding and partners.